Tesla stock (NASDAQ: TSLA) remained in the flat territory Tuesday as Wall Street analysts moved to the sidelines, trimming growth forecasts ahead of the electric automaker’s fourth-quarter delivery report.
The share price was slightly up, after facing some serious headwinds in December as Morgan Stanley downgraded the name, citing slowing momentum and a valuation that has detached from near-term fundamentals.
The analyst mood marks a shift that tempers investor enthusiasm following the stock’s record run in December.
Tesla stock: Analyst revisions and the data behind them
The most significant jolt came from Morgan Stanley, a firm long associated with the wildest bullish calls on Tesla.
Analyst Andrew Percoco lowered the stock to “Equal-weight,” arguing that the “AI premium” baked into the share price is now fully priced in.
While the firm technically raised its price target to $425, that figure sits comfortably below current trading levels, effectively signaling zero upside.
“The ‘growth at any price’ phase is over; the market is moving to ‘show me the revenue,’” the analyst team noted, pointing out that Tesla’s valuation.
This caution is rooted in hard data.
In a rare move, Tesla recently published a company-compiled consensus on its own investor relations site, projecting Q4 2025 deliveries of approximately 420,000 units.
That figure represents a 15% decline from the record 497,000 vehicles delivered in the third quarter, a sequential drop that defies the typical year-end sales blitz.
Analysts attribute this slowdown to cooling demand in key markets like China and supply chain calibrations as Tesla preps for 2026 model rollouts.
Tesla at inflection point
The immediate catalyst is the Q4 delivery report, expected within days.
If actual numbers miss the lowered 420,000-unit bar, it could confirm fears that demand is softening faster than cost-cuts can compensate.
Investors are also bracing for the next earnings call, where the focus will shift to automotive gross margins. With pricing power under pressure, any slip in margins could force a rapid repricing of the stock.
Technical indicators suggest the battleground is shifting.
While bulls point to a “golden era” of AI and robotics, with Wedbush maintaining a Street-high $600 target based on the Cybercab narrative, institutional flows tell a more cautious story.
The recent divergence between Tesla’s soaring stock price and its flatlining delivery growth has pushed short interest slightly higher, as hedge funds hedge against a “reality check” correction.
Analysts have dampened expectations, creating immediate downside risk but identifying clear milestones for recovery.
Investors should watch the upcoming delivery print and margin guidance closely, these metrics will determine whether the current downgrade cycle is a temporary blip or the start of a longer valuation reset.
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